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PULP, PAPER AND PACKAGING INDUSTRY OF MYANMAR

Introduction

This compendium focuses on recent developments in Myanmar’s pulp and paper and cardboardpackaging industry. The traditional craft of ornamental papermaking, still practised in someparts of the country, is not touched on in the articles included here.

The recent openings of a large new bamboo pulp plant and its first paper plant using jute asfeedstock can be taken as signs that Myanmar is poised to leave behind its position near thebottom of paper producing countries in Southeast Asia. Moreover, other new mills are in theplanning and construction phases.

Paper consumption has also risen notably in the country during the last few years – over 35% inthe last three years alone. Nevertheless, Myanmar still had to import two thirds of the paper itused in 2004. And the conditions under which the industry is being developed make it highlyunlikely that this imbalance will be altered in the near term.

Most of the machinery for the new mills either under construction or in the planning stages isbeing imported from China and the agreements under which they are being built requires thatpayments be made through the export of a large portion of the pulp that will be produced in theearly years of operation.

Restrictions are also laid on the expansion of the industry by shortages of adequate feedstock forthe small private factories and workshops that produce almost half of the paper and cardboardmanufactured in the country. Many of these smaller plants still operate with antiquatedmachinery and their owners lack the necessary resources to import new equipment or upgrade theold.

Most articles in the compendium are arranged in chronological order with the most recent ones atthe head of the list. However, in some cases it was considered to be more useful to gatherreference to a single factory under a single heading. e.g., those dealing with the Sittoung papermill.

The article headings have been changed from the original headlines in many cases to morefaithfully reflect the contents. Some articles have been shortened or edited to make them moreappropriate to their place in this collection.====================================================================

Bibliography

The only general study of the pulp and paper industry in Myanmar that we have been able tolocate is a brief entry in an FAO country report published in 1997. Although much of theinformation in the article is now outdated we have included in the compendium for referencepurposes.

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Bamboo is the main natural feedstock available to the pulp industry in the country and briefreferences that deal with this subject from three technical papers on bamboo have been added atthe end of the compendium

Courier Information Services: excelsus@shaw.ca

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Articles

200-TON THABAUNG PULP PLANT COMMISSIONED INTO SERVICEMAUBIN JUTE MILL BEGINS PAPER PRODUCTION YENI PULP AND PAPER MILL TO GET $ 81.5 MILLION UPGRADESITTOUNG PAPER MILL TO DOUBLE PRODUCTIONCHINESE FIRM TO BUILD BAMBOO PULP MILL IN NORTHERN RAKHAING KENAF FACTORY IN MYANMAR A WORLD FIRST BETTER ACCESS TO RAW SUPPLIES NEEDED FOR CARDBOARD PRODUCTIONRECYCLED PAPER MARKET SLIPS AS MAGAZINE, BOOK CIRCULATION FALLS MYANMAR PRODUCES MORE PAPER PRODUCTS IN 2001 PAPER INDUSTRY BOOST LOOMS AS PLANS AIRED FOR 13 MILLS THREE OLDER STATE-OWNED PAPER MILLS BRIEFLY DESCRIBED FIRST NEWSPRINT MILL IN MYANMAR OPENED IN PALEIKKOREAN CARTON MAKER ATTRACTED BY CHEAP LABOUR POOLPAPER MILL ENTREPRENEUR FACES TOUGH TIMES AHEAD EAST ASIAN TENDERS SOUGHT FOR NEW PAPER MILLS PACKAGING INDUSTRY SQUEEZED BY FOREIGN COMPETITION MYANMAR PAPER MILL OPENS IN DAGON MYOTHIT PULP AND PAPER INDUSTRY IN MYANMAR BAMBOO STANDS SUITABLE FOR MAKING PULP IN MYANMAR

====================================================================Photo Credits

Figure 1,2 The New Light of MyanmarFigure 3,4 The New Light of MyanmarFigure 5,6 MRTV3Figure 7 Myanmar TimesFigure 8 Myanmar Ministry of Forestry ====================================================================

200-TON THABAUNG PULP PLANT COMMISSIONED INTO SERVICE )ContentsThabaung: New Light of Myanmar: 15-05-05

The inauguration of the 200-ton Thabaung Pulp Plant of Myanma Paper and Chemical Industriestook place at the plant near Hlaygyitet Village in Thabaung Township with an address by Prime

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Minister Soe Win. Also present on the occasion was a member of the SPDC, cabinet ministers,deputy ministers, officials, the Chinese ambassador to Myanmar, the president of ChinaMetallurgical Construction Corporation Mr Ma Yanli, and local residents.

In his address Lt-Gen Soe Win said that Thabaung would become a region endowed with manyindustries based on paper thanks to the emergence of the pulp plant. Out of the 200 tons of pulpthe plant produces daily, 150 tons will be exported, and 50 tons will be used in producing qualitypaper and different types of paper. According to the process, a 50-ton quality paper plant and a60-ton newsprint plant will be built. In a few years, these a paper mill and newsprint mill will becompleted, and by then, Thabaung will become a region of paper and chemical zone creating alot of job opportunities, and modern technologies will be disseminated in the region.

Now, the annual pulp manufacturing capacity of State-run factories -- Sittoung, Yeni, Paleik andKanbe pulp plants -- is around 25,000 tons and 300 private factories [are producing] more than27,000 tons. Due to the technological changes, the State's paper demand is on the considerableincrease. The nation's paper production fulfils only 33 per cent of the demand [amounting to]160,000 tons a year. As a result, the government has to build new pulp plants and paper plants,while repairing or upgrading the old ones. The plants in the compound of the Thabaung PulpPlant will enable the industry to produce not only exports but also import-substitute items.

The State has had to invest K 28 billion plus US$ 90 million in the Thabaung Pulp Plant Project.It will also has to pour US$ 18 million into the quality paper plant project and more than 36million into the paper plant for production of newspaper paper. Such a gigantic project is beyondthe reach of national entrepreneurs and paper industry is the one necessary for the State.Therefore, the State has established a paper and pulp mill based on the nationÕs rich forestresources for establishment of an industrialized nation.

Managing Director U Than Shwe and officials of Myanma Paper and Chemical Industriesreported on the running and process of the thermal power and recovery plants. Next, the PrimeMinister and party inspected production of caustic soda and chlorine oxide, cutting of bambooand stockpiling of bamboo. They inspected unloading of bamboo from Ngawun River andbamboo rafts, water treatment plant. They also attended a stake-driving ceremony of the 50-tonpaper mill. -------------------------------------------------------------------------------------------------------------------

Figure 1: New pulp mill at Thabaung Figure 2: New pulp mill at Thabaung

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Thabaung in Ayeyawady Division has become an industrial region endowed with manyindustries based on paper thanks to the emergence of the [new pulp] plant. It gets raw materialsfrom about 400,000 acres of bamboo in Thabaung, Yekyi, Laymyethna and Ngapudaw townshipsin the western part of Ayeyawady Division and Gwa Township in Rakhine State. Out of the 200tons of pulp the plant has planned to produce daily, 150 tons will be exported and 50 tons will beused in producing quality paper and different types of paper. According to the process, a 50-tonquality paper plant and a 60-ton newsprint plant will be built. . . . [Currently], the annual pulpmanufacturing capacity of State-run Sittoung, Paleik and Kanbe pulp plants is around 25,000tons and 300 private-run plants, more than 27,000 tons. Due to the development in varioussectors, the State’s paper demand is on the considerable increase. The nation’s paper productioncan fulfil only 33 per cent of the demand of 160,000 tons a year. . . . Up to now, out of thefactories, mills and plants in Myanmar, Thabaung Pulp Plant is the largest one in terms ofinvestment, production volume and strength of employees. Since the year 2000, the region hasbeen establishing tree plantations in concert with the Ministry of Forestry for industrial rawmaterials and to avoid compromising the environmental conservation. So far, 12,650 acres hasbeen put under tree plantations and 3,000 acres, bamboo plantations. (Thabaung: Moe HtetMyint: New Light of Myanmar: 14-06-05)--------------------------------------------------------------------------------------------------------------------

Paper factories in Myanmar, including state and private operated ones, produced a total of 57,000tons of paper a year against its demand of 160,000 tons, according to the latest official statistics.The figures also show that Myanmar imported over 80,000 tons of paper annually, includingthose through border points. (Yangon: Xinhua: 14-05-05)--------------------------------------------------------------------------------------------------------------------

Prime Minister General Khin Nyunt and party arrived at the 200-ton pulp factory project(Thabaung) in Hlaygyidet Village in Thabaung Township. Managing Director of the MPCI UThan Shwe reported on completion of construction work, acquisition of raw materials,establishment of bamboo groves and wood plantations for newsprint mills . . . and the sitechosen for construction of 12-mile long Daka-Hlaygyidet production road. The PM called onofficials of the Ministry of Industry-1 and the Ministry of Forestry to make field tours to collectcorrect data relating to the raw materials and presented a fruit basket to President Assistant MrXiangchun Xu and Project General Manager Mr Liu Hua of China Metallurgical ConstructionCorporation. The 200-ton pulp factory project (Thabaung) is located on 1,107 acres andconstruction started on 1 November 2001. Efforts are being made to complete the project byApril 2004. (Thabaung: New Light of Myanmar: 07-09-03)

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Minister for Industry-1 U Aung Thaung arrived at the 200-ton Pulp Factory Project (Thabaung)in the Hlegyitet area of Thabaung Township [where the ministry] . . . is implementing a 50-tonPaper Mill Project, a 60-ton Newsprint Factory Project and a 200-ton Pulp Factory Project witha view to ensuring manufacturing of import substitute products. Afterwards, the minister met

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local people and gave instructions on opportunities of job vacancy in implementing the projectfor local people and attended to their needs.

The minister then inspected thriving trees which are on the first phase 850 acres for the 200-tonPulp Factory of Kyaukchaunggyi forest reserve. Deputy Director-General U Shwe Kyaw ofForest Department reported to the minister on planting, conservation and cutting of trees in theforest reserve in Pathein Township. The minister said 2,000 acres of tree plantation should begrown a year instead of 1,000 acres, then, 10,000 acres of plantation must be extended and theMinistry of Industry-1 and the Forest Department are to cooperate conservation of thriving treesand take measures for fire prevention. (Thabaung: New Light of Myanmar: 24-12-00);

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Myanma Paper and Chemical Industries under Ministry of Industry-1 and China MetallurgicalConstruction (Group) Corporation of the People's Republic of China signed a 90 million-dollarcontract on building a pulp factory with a daily production capacity of 200 tons at Hlaygyitetvillage, Thaboung township, Ayeyawady Division. Speaking on the occasion, Minister forIndustry-1 UAung Thaung said the remaining contract cost is to be settled through barter system.Mr Yang Chang Heng also spoke words of thanks. Managing Director of MPCI U Ngwe Thawand Mr Yang Chang Heng signed the contract. (Yangon: New Light of Myanmar: 01-09-00)

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MAUBIN JUTE MILL BEGINS PAPER PRODUCTION )ContentsYangon: Myo Lwin: Myanmar Times: 14-02-05

Commercial production of high quality paper began late last month at the new mill at Maubin inAyeyawaddy Division, an official from the Ministry of Agriculture and Irrigation said. A generalmanager of the ministry’s Myanma Jute Industries, U Ye Gaung, said the mill would produce5000 tonnes of white paper a year from jute, which grew in abundance in the area. “We havemade test runs and the paper quality was found to be 80 per cent white, which is pretty good,” UYe Gaung said in a telephone interview. Commercial production had begun on January 29, whenthe opening ceremony was held for the mill, he said.

The mill was built as a joint project by the MJI and the China Yunnan Corporation, whichprovided nearly US$5.7 million worth of machinery. The MJI invested nearly K2 billion in theproject, mainly on civil works, U Ye Gaung said. “As agreed when we signed the contract inSeptember 2002, we have paid 40 per cent of the cost for the machinery during the past threeyears,” he said. The balance would be covered from the sale of paper to the China YunnanCorporation at a contract price of $700 a tonne, he said. This would enable the balance of themachinery costs to be paid in about two years, said U Ye Gaung.

He said the project was mutually beneficial as it enabled the corporation to sell its machinery,while Myanmar would be able to produce an import substitute. The paper would be sold on thedomestic market after the machinery had been paid for. “Instead of exporting raw jute, we aremoving forward to producing a value-added product which will fetch a better price and also

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create jobs,” U Ye Gaung said, adding that the mill has a workforce of 300. He said the mill,which would need 15,000 tonnes of raw jute a year, was environmentally friendly because it didnot contribute to deforestation. U Ye Gaung said MJI previously operated a jute bag factory atMaubin but it had ceased production because of competition from plastic bags, which werecheaper.--------------------------------------------------------------------------------------------------------------------

A ceremony to inaugurate Maubin Paper Mill of Myanma Jute Enterprise was held at the millnear Pantaput Village of Maubin township yesterday morning. . . . Managing Director U YePhone Myint reported on production capability, purchase of raw materials and growing of jute. Minister for Agriculture and Irrigation Maj-Gen Htay Oo said the mill will contribute towards theeconomic development of local jute growers [as they will] have opportunities to sell all parts ofthe jute plant to the mill. Machinery imported from China [through the] Yunnan Corporation [isable] to produce quality paper by using the whole plant. Paper produced at the mill will be of aquality that can penetrate foreign markets. . . . . . Chairman of China Yunnan Corporation MrGuo Xiao Yong gave a speech.

Maubin Paper Mill has the capacity to manufacture 17 tons of paper a day, 455 tons a month and5,000 tons a year. It will produce 2,500 tons of writing paper and 2,500 tons of offset printingpaper a year. Though the mill requires 9 million viss of jute raw materials annually, a total of 9.3million viss of raw materials are kept at the mill. A plan is under way to extend sown acreage ofjute annually. (Maubin: New Light of Myanmar: 31-01-05)

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Figure 3: Jute pulp processor at Maubin mill Figure 4: Finished rolls of paper

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YENI PULP AND PAPER MILL TO GET $ 81.5 MILLION UPGRADE )ContentsYangon: Thet Hlaing: Myanmar Times: 04-10-04 Myanma Paper and Chemicals Industries plans to start work later this year on a US$ 81.5million project that will more than triple kraft paper production at a mill in Bago Division, asenior government official said last week. The general manager of MPCI, U Thein Win, said theproject involved building a new production facility at the Yeni mill at Yedashe that wouldincrease its daily kraft paper output from 25 tonnes to 105 tonnes. The project also includesbuilding a factory at the mill capable of producing 50 tonnes of paper pulp a day, of which 25tonnes would be supplied to the ministry’s newsprint plant at Paleik in Mandalay Division. The

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Paleik plant currently uses recycled newspapers as raw material. Buyers for the other 25 tonneswould be sought in Myanmar and overseas, U Thein Win said.

He said the buildings and equipment for the expansion project would be supplied by China’sChengda Chemical Engineering Corporation, under a turn-key contract it signed with theministry in 2001. “We expect work on the project to begin in early November after a 10 per centpayment is made to the Chinese company,” U Thein Win said.

The kraft paper will be made from bamboo and supplied to cement producers to make bags. UThein Win said the number of factories making cement had increased and being able to supplythem with kraft paper would help to reduce reliance on imported bags.

The 50 tonnes pulp factory will use softwood as a raw material. The expansion plan at the 620-acre compound at the mill includes the installation of a chemicals recovery system to processwaste water. “The new chemical recovery system will bring cost savings and reduce pollution,”U Thein Win said.

The MPCI general manager also revealed last week that the Ministry of Industry (1) and aChinese company have signed a memorandum of understanding to build a factory at Monywacapable of producting 200 tonnes of paper pulp a year. U Thein Win said the MoU with theTsingda Daring Biotechnologies Group Corporation was signed in early August. He said theMoU provided for the factory to go into production within two years, subject to the availabilityof electricity and natural gas. The natural gas was needed to operate boilers as steam was neededto make pulp. He said it would take at least 18 months to complete the factory, which wouldexport most of its output to China under a buyback system. The pulp will be used to make high-quality paper.

Negotiations on the project began three years ago and the two sides needed to finalise detailsabout the cost and payment systems, U Thein Win said. In 2001, the ministry conducted apreliminary survey at the proposed site of the mill, at Aung Moe Village about three miles northof Monywa. The project followed a report by the Ministry of Forests about the area’s forests andits potential for establishing eucalyptus plantations, which would be used as a source of rawmaterials for the mill. U Thein Win said natural forests would not meet the raw material needs ofthe mill and the ministry planned to establish about 120,000 acres of eucalyptus plantations. About 3,000 acres of plantations had already been established and another 10,000 acres would beplanted this year. The mill will need about 1,000 tonnes of timber a day to operate at capacity. UThein Win said the mill would benefit Myanmar by transferring technology and creating jobs.=====================================================================

SITTOUNG PAPER MILL TO DOUBLE PRODUCTION )ContentsYangon: Thet Hlaing: Myanmar Times: 27-09-04 Production from the Sittaung paper and pulp mill* at Kyaikhtiyo in Mon State will more thandouble in early November after a US$7.92 million renovation project is completed, a seniorgovernment official said. The general manager of the Department of Myanma Paper andChemical Industries under the Ministry of Industry (1), U Thein Win, said daily paper production

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from the mill will rise to 40 tonnes, from 20 to 25 tonnes. Daily pulp production would rise from25 tonnes to 60 tonnes, U Thein Win said.

The mill, which makes paper from bamboo**, is being renovated*** under a contract signed inDecember 2002 between the ministry and the China National Machinery and Equipment Exportand Import Corporation. Equipment supplied under the contract has included bamboo chippingmachines, pulp leaching equipment and boilers to increase the efficiency of the mill’s chemicalrecovery and water treatment systems.

U Thein Win said the renovation project was needed to upgrade facilities at the mill, which wentinto production in 1970 and has a workforce of 3000. U Thein Win said renovating the chemicalrecovery system would bring cost savings and reduce pollution. The system would increase therecovery rate of the toxic chemicals used in the production process – caustic soda and sodiumsulphate – from 20 per cent to 80 per cent. The chemical recovery and water treatment systemswould ensure that waste water released into the Sittaung River did not harm the environment, UThein Win said.

Figure 5: Sittaung pilp and paper mill Figure 6: Sittaung pulp and paper mill

--------------------------------------------------------------------------------------------------------------------* See also the article below: “Three older paper mills briefly described”

** A report published by Earthrights International in 2003 describes the way in which thebamboo is procured for the Sittoung mill from the eastern Bago yoma: “The Sit Taung PaperFactory in Thein Zayat Village [pays] local people, many of whom are extremely poor, fromPayagyi, Pagu, Thein Zayat, and Kyaiton to cut down their stands of bamboo for which theyreceive 10 Kyat per one full-length of bamboo (a mature piece of bamboo is typically 20-30 feetlong). To bring the bamboo to market, it is transported from the jungle to Thein Zayat and then toKyaiton, a twelve-hour journey. After the bamboo arrives in Kyaiton, it is resold at a rate of 150Kyat per length of bamboo, a substantial increase even after transportation costs are taken intoaccount. Estimates place the total number of bamboo posts harvested per year to be over onemillion. In most cases, the villagers comb tracts of land which have just been logged. By the timethey have completed cutting the bamboo, this land is completely bare. (Capitalizing on Conflict:How Logging and Mining Contribute to Environmental Destruction in Burma: p. 35.http://www.earthrights.org/pubs/capitalizing.pdf

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*** There has been a steady stream of repairs, renovations and additions to the Sittoung mill and adjoining facilities over the last dozen years, including work done by Yunnan Chemicals I & ECorp for a plant (US$6 million) to produce 5,000 tons of caustic soda a year, plus, as by-products, 1,000 tons of chlorine, 5,000 tons of hydrochloric acid, 2,000 tons of bleaching powder,and 33,000 tons of bleaching solution (WPD: 23-04-92); another renovation of the caustic sodaand chlorine plant carried out by Kunming Electro-Chemical Plant of Yunnan (US$ 1.2 million)designed to increase daily production from 9 to15 tons daily (Xinhua: 23-12-98); major repairsto the chipper mill by China Chenhou Highway Engineering Machinery Works and ChinaNational Complete Plant I & E Wuhan Corp to boost production up to 60 tons of pulp per day;.major repair to No 2 Boiler at the Water, Steam and Power Plant (NLM: 05-02-01); major repairsto the machinery in the caustic soda and chlorine factory installed by Kunming Electrochemicalwith plans announced to upgrade the mineral salt recycling factory, the pulp plant and the papermill by China National Machery and Equipment I & E Corp (Business Tank: 12-02). The latter,begun in May 2003, were still underway at the beginning of 2005. Work is currently underwayto improve the water supply to the mill (NLM: 13-05-05);

CHINESE FIRM TO BUILD BAMBOO PULP MILL IN NORTHERN RAKHAING Yangon: Thet Hlaing: Myanmar Times: 16-08-04 )Contents A new pulp factory will be established and an existing one expanded in Myanmar within twoyears under a bilateral cooperation plan with China, said a senior government official last week. The director-general of the Directorate of Industry under the Ministry of Industry 1, U KyawMyint, told Myanmar Times that work on the pulp factories in Rakhine State and AyeyarwaddyDivision will begin soon and will take at least one-and-a-half to two years to complete. Theproducts from the factories will be sold to China, he said. The bilateral cooperation plan wasmade possible by the signing of a memorandum of understanding between the Ministry ofIndustry (1) and the China Metallurgical Construction (Group) Corporation during the goodwillvisit of the Prime Minister, General Khin Nyunt, to China from July 11 to 17. U Kyaw Myintwas one member of the delegation that made the journey at the invitation of China’s PrimeMinister, Mr Wen Jiabao.

U Kyaw Myint said the MOU calls for the establishment of a factory capable of producing 500tonnes of pulp a day near the town of Ponnagyun, in Rakhine State, and the expansion of afactory in Thabaung township, Ayeyarwaddy Division, from a capacity of 200 to 500 tonnes aday. “The projects will begin within the next six months, but discussions about the details arestill needed,” he said. “The projects are expected to be constructed based on a 100 percentforeign direct investment scheme under the build, operate and transfer system [in which thefactories will eventually be transferred to government control]. And the Myanmar governmentwill provide infrastructure like roads, bridges and energy supply,” U Kyaw Myint said.

He said experts from China Metallurgical Construction (Group) Corporation surveyed theRakhine State site two times, finally choosing it from among four feasible locations in the region. According to the corporation’s survey team, satellite photos revealed that the area is near one ofthe world’s biggest commercially viable bamboo forests. The Rakhine factory will consumenearly 900,000 tonnes of bamboo a year, U Kyaw Myint said. The government will supply

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electricity to the Ponnagyun factory using a turbine fueled by natural gas extracted from off thecoast of Rakhine State.

U Kyaw Myint said the Ayeyarwaddy Division factory is slated to begin commercial productionat 200 tonnes a year in September and will be expanded later. The majority of products from thefactory will be sold to China under a buyback system. The rest will be used as raw material for anew factory that will produce 50 tonnes of high-quality paper a day for domestic use only, UKyaw Myint said. He said more Chinese investors were interested in establishing pulp factoriesin Myanmar because there is a high demand for pulp among China’s paper industry. “During ourrecent goodwill visit, many Chinese companies showed an interest in establishing pulp factories,”he said.

He said representatives from these companies met with U Aung Thaung, the minister of theMinistry of Industry 1, to discuss investments. U Kyaw Myint said the ministry will beresponsible for negotiating pulp factory projects with foreign investors. U Kyaw Myint also saidthe employment policy for the new factories, as well as for the existing 200-tonne-factory, callsfor giving hiring priority to people who live nearby. The factories will benefit Myanmar bybringing in more foreign income, transferring technology to the country and creating more jobs,he said.

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KENAF FACTORY IN MYANMAR A WORLD FIRST )ContentsYangon: Myo Lwin: Myanmar Times: 25-08-03 Construction of the world’s first kenaf pulp processing factory in Myanmar has been progressingregularly despite the initial delays in civil works, according to government officials. “Up to lastweek, we have struck nearly 100 piles but we still need to lay 200 more for the factory.Construction of roads have almost been finished,’’ said officials from Myanma Jute Industries[Enterprise]. We are also expediting the importation of machines required for the factory fromSingapore, they added.

MJI and a private company from Singapore agreed last year on the establishment of the US$4million factory in Oaktwin in Bago Division, for the production of paper pulp from kenaf fibre.Under the agreement reached with MJE and Skymoon Singapore, the latter would buy back allthe paper pulp produced at the plant for which it will provide machinery and technology.[Officials] said the civil works were a bit late because of the delays in choosing the location forthe factory which has a target of producing 5000 tonnes of paper pulp a year.

The factory would be the world’s first to produce paper pulp using kenaf fibre as raw material,according to officials from MJI, which is also interested in producing value-added products suchas high quality paper for printing bank notes. The pulp can also be mixed with materials such asbamboo for moulding into car dashboards and other products which have become popularbecause of its advantages in terms of low environmental impact.

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The MJI officials said they have had enquiries for the paper pulp from Japan Kenaf cultivationin Myanmar has increased to 30,000 acres this year from 10,000 acres two years ago. Kenaf isalso grown in Malaysia where it has proved to be a source of foreign exchange through exportsof animal feed made from the high protein leaves of the plant. Kenaf fruit is also used to makedyes and edible oil can be extracted from its seeds. Also known as brown Indian hemp, kenafhas long been grown in India and other warm countries like Myanmar for its brittle fibre, used inmaking coarse fabrics and rope. The plant may either be annual or perennial bearing pricklystems.

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A ceremony to sign an agreement on pulp factory construction project took place at the meetinghall of the Ministry of Agriculture and Irrigation on Thiri Mingalar Lane of Kaba Aye PagodaRoad this morning. It was attended by Minister for Agriculture and Irrigation Maj-Gen NyuntTin, Indian Ambassador Mr Rajiv Kumar Bhatia, Singaporean Ambassador Mr Simon Tensingde Cruz, members of Board of Directors of the Sky Moon Singapore Pte Ltd and officials.Managing Director of Myanma Jute Enterprise under the ministry U Myint Maung and GeneralManager of the Sky Moon Singapore Pte Ltd Mr Jonathan signed the agreement and exchangedthe documents. The factory will be constructed near Wati Village* in Ottwin Township, BagoDivision, and it will produce 5,000 tons of pulp based on raw kenaf a year. (NLM: 07-09-02)--------------------------------------------------------------------------------------------------------------------

* An article in NLM on 23-05-03 locates the site of the proposed pulp factory “at Zibyuthaungjute field of Myanma Jute Enterprise near Banbwegon Village, Ottwin Township”. There havebeen no other reports about this project in the Myanmar press since then. The website of theCentral Pulp & Paper Research Institute notes that the institute has a contract with Skymoon(Singapore) Pte Ltd to provide “complete technology know-how, basic engineering and trainingfor setting up a high quality bleached pulp mill in Myanmar based [on] decorticated kenaf bastfibre as raw material”.

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BETTER ACCESS TO RAW SUPPLIES NEEDED FOR CARDBOARD PRODUCTIONYangon: Win Nyunt Lwin: Myanmar Times: 20-01-03 )Contents

Private corrugated paper mills have the potential to fulfil Myanmar’s demand for 100 tons ofcardboard a day if they can gain access to more raw materials, said industry experts in a series ofinterviews last week. Of the cardboard Myanmar consumes daily, 70 per cent is produced by private domestic corrugated paper factories centred in Yangon and Mandalay. Domesticproduction saves US$5 million a year through import substitution.

The remaining 30 tons come from government factories and abroad, specifically, Malaysia,Indonesia, Thailand, South Korea, and China, said U Zaw Naing, a director of Yangon’s PyanHlwar paper mill, in an interview with the Myanmar Times last week. With a productioncapacity of 30 tons a day, Pyan Hlwar is the largest of the four paper mills in Yangon: Asia

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World, New Century, and San Yee, and two in Mandalay: World and Aung, which dominate thecardboard production industry.

Two of the biggest problems facing the industry are erratic electricity and a dearth of pulp. PyanHlwar runs 10 tons below optimal production capacity because of irregular electricity, but,according to U Zaw Naing, "for the present situation, our production depends more on therecycled paper stock. If we can get as much as we want, we will be able to produce more."

The paper mills obtain their recycled paper from carton factory waste and from waste papercollection shops. Raw materials have more than doubled in price in 2001, leaping from 55,000kyat a ton to 120,000 kyat a ton, before settling last year at an average of 110,00 kyat per ton.

One ton of domestically produced cardboard sells for an average of K230,000 a ton, dependingon the price of recycled paper stock, whereas a ton of imported paper runs about K40,000 higher.As the economy expands and presentation becomes more important to consumers, U Zaw Naingsaid, "more packaging will be needed and the carton factories will use more of our paper."

Raw pulp, which produces better quality cardboard than recycled paper pulp, will be necessary inthe future if Myanmar’s industry is to keep its domestic market share and competeinternationally. Ko Tun Tun, from the Aung paper mill in Mandalay, said in a telephoneinterview last week, "the more we can produce, the more we can provide as a substitute forimported packaging paper."

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RECYCLED PAPER MARKET SLIPS AS MAGAZINE, BOOK CIRCULATION FALLS Yangon: Soe Than Lynn: Myanmar Times: 24-06-02 )Contents

In Myanmar, paper consumption, including recycled paper, is over 100,000 tons a year and theuse of recycled paper constitutes 70 per cent of total consumption. In the first week of June, theprices of recycled paper of various qualities fell by 10 per cent because circulation of somemagazines, journals and books decreased, and the printing and binding of school exercise booksand text books had almost finished. Before Thingyan Festival, the paper market mainly relies onthe production of school exercise books, however a bonus was the appearance of many weeklyjournals focusing on international news; especially the September 11 attacks on the US.

But with the closure of many of these opportunistic publications and the sluggish market forexercise books, over 100 paper shops in Yangon are faced with a cool business environment. Ofthe thousand or so paper mills in Myanmar, many have scaled back or temporarily stoppedproduction because the sale of paper at the shops is almost non-existent.

All recycled paper mills in Yangon rely on used exercise books and old newspapers from aroundthe country. Paper trimmings from binding and printing houses are also used as raw materials formaking recycled paper, but these sources cannot fill the needs of over 1000 paper mills inYangon.

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MYANMAR PRODUCES MORE PAPER PRODUCTS IN 2001 )Contents Yangon: Xinhuanet: 01-02 -02

Myanmar produced 17,839 tons of all sorts of paper in the first ten months of 2001, 24.96 percentmore than the same period of 2000, the latest data of the country's Central StatisticalOrganization show. During the period, Myanmar imported 59.79 million U.S. dollars worth ofpaper goods, an increase of 40.48 percent compared with the corresponding period of 2000, tomeet its domestic demand. In 2000, the country produced 16,894 tons of paper and imported48.1 million dollars worth of paper manufactures.

There are three state-run paper plants in Myanmar under the Ministry of Industry No.1respectively located in the country's Mon state, Bago and Yangon divisions. They are producingstationery and print paper, exercise books, brown paper, packing paper and tissue paper.

A new newsprint paper factory in Mandalay division, set up in April 2001 with the assistance ofthe Tianjin Machinery Import and Export Corporation of China, will produce 7,500 tons of paperannually. Besides, Myanmar is also building a 200-ton-daily-capacity bleached bamboo pulpfactory in Ayeyawaddy division's Thabaung township, buying machinery from China. Whencompleted, the plant will produce 60,000 tons of the pulp yearly. Meanwhile, Myanmar plans toadd more paper and pulp mills of 50 to 500 tons daily capacity in different states and divisionsduring the five-year-plan period from 2001-02 to 2005-06.

Myanmar's per capita consumption of paper is 2.6 kilograms and its total domestic paper demandin the present fiscal year of 2001-02 ending March is 117,600 tons.

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PAPER INDUSTRY BOOST LOOMS AS PLANS AIRED FOR 13 MILLS )Contents Yangon: Aung Kyaw Tha: Myanmar Times: 18-11-01

Production capacity in the paper-making industry is being sharply expanded, with plans beingunveiled for 13 mills. Myanma Paper and Chemical Industries (MPCI) said the planned mills, tobe built throughout the country, would produce newsprint as well as high-grade products such asart paper. MPCI managing director U Than Shwe said easy access to raw materials – bamboo orwood – would be a critical factor in determining whether all the projects went ahead.

U Than Shwe said the other two essential requirements for a paper mill were access to water andelectricity. He said international tenders would be let for the mills. They included a contractsigned last August with the China Metallurgy Construction Corporation for paper millingcomplex capable of producing 200 tons of pulp and 50 tons of newsprint a day. It will be built inthe Ayeyarwaddy Division town of Thabaung, about 120 miles west of Yangon, and is expectedto be finished in 30 months.

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MPCI is also negotiating with a foreign company for a contract to extend a mill in the BagoDivision town of Ye Ni, about 190 miles north of Yangon. The extension would enable the millto double production to 130 tons a day, of which 80 tons would be brown packaging paper and 50tons would be newsprint.

Tenders have been called for a pulp mill at Thabeikkyin in Mandalay Division capable ofproducing 200 tons a day and a complex at Monywa in Sagaing Division with a productioncapacity of 200 tons each of pulp and newsprint a day. Tenders have also been called to extend apaper mill at Sittaung in Mon State.

Paper consumption in Myanmar is 2.5 kilograms a person a year, compared to seven kilograms inVietnam, 30 kilograms in Thailand, 100 kilograms in Malaysia and 200 kilograms in Japan andWestern nations. U Than Shwe said he hoped paper consumption would reach at least that ofThailand within five years.

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THREE OLDER STATE-OWNED PAPER MILLS BRIEFLY DESCRIBED )ContentsAung (Set Hmu): New Light of Myanmar: 28-10-01

There are nine factories under the Myanmar Paper and Chemical Industries of the Ministry ofIndustry-1. The factories are producing stationery and print paper, cement wrapping paper,packaging paper, tissue paper, pulp, caustic soda, bleaching chlorine gas, sulphuric acid, dyeingpowder, enamel paint, other paint, matches, oxygen gas for hospital use, various kinds of gas forindustrial use, batteries, liquid soap and soap powder.

Of the three existing paper plants in Myanmar . . . the largest is the No 1 Paper Plant . . . on a926-acre plot on the east bank of the Sittoung River in Kyaikto Township. The plant is dividedinto pulp and paper division, mineral salt reproducing division, pulp factory extension divisionand chemical divisions. Pulp and paper manufacturing machines imported from the ChinaNational Machinery Import and Export Corporation of the PRC and the Kanematsu Gosho CoLtd of Japan were installed at the plant. Production started in 1971. The initial investment for theplant (four production divisions) is K 452.196 million and US $ 65.504 million. At present, theplant is producing stationery and print paper, exercise books and brown paper. The productiontarget for fiscal 2001-2002 is 8,140 tons of stationery and print paper, 1,320 tons of exercisebooks and 440 tons of brown paper totalling 9,900 tons. The total staff strength of the plant isabout 2,500. Bamboo, the main raw material requirement of the plant, is supplied from Yedashe,Toungoo and Shwekyin townships in Bago Division, and Kyaikto and Bilin townships in MonState. Since December 1997, the SPDC government has assigned the Ministry of Forestry and theMinistry of Industry-1 the duty to jointly conserve and protect bamboo groves of the forest areaof eastern Yedashe Township and the forest area of Shwekyin Township, to ensure uninterruptedsupply of raw materials to the plant.

The Yeni No 2 Paper Plant, second largest of the three, is located on the Yangon-MandalayHighway south of Yeni town in Yedashe Township. In the phase 1 of the factory project,machines were imported from the Security Printing AG Company of Germany and installed at

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the plant to produce ten tons of matches and card paper per day. The first phase of the factoryoperation began in March 1979. In the second phase, machinery was imported from MitsubishiHeavy Industries of Japan through the Kinsho Mataichi Corporation and installed at the plant tomanufacture 25 tons of cement wrapping paper per day. Operation of the second phase began in1981. At present, the Yeni No 2 Paper Plant is manufacturing matches and packing paperincluding cement wrapping paper. The plant has targeted to produce 1,500 tons of matches and6,000 tons of packing paper in fiscal 2001-2002. The plant is employing over 1,000 staff. Bamboo, the main raw material, comes from forests in Yedashe, Lewe and Pyinmana townships.The plant is co-ordinating with the Ministry of Forestry to set up its own bamboo plantations. Plans are under way to plant 1,000 acres of bamboo groves beginning this year. The plant willput over 10,000 acres under bamboo.

The [Kanbe] paper plant is located on Kaba Aye Pagoda Road in Yankin Township, Yangon. Itwas originally set up as a private company [registered in] the Federal Republic of Germany underthe name "Gazette Limited" in 1965. As the German company could not continue to run theplant, it was transferred to the Ministry of Industry-1 through the Industrial Department. Theministry imported more machinery from the German company for the plant in 1966. It beganproduction of packing paper in 1968. In fiscal 1993-94, a paper machine capable of producingone ton a day was imported from the China Wuhan Corporation of the PRC. Since then, theplant has been manufacturing Dolphin brand tissue papers. In fiscal 2001-2002, the plant istargeted to produce 900 tons of packing paper and 230 tons of tissue paper. The paperproduction division is recycling waste paper and packaging material from offices and schools formanufacturing its products.

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FIRST NEWSPRINT MILL IN MYANMAR OPENED IN PALEIK )ContentsMandalay: New Light of Myanmar: 15-04-01

Chairman of the SPDC Senior General Than Shwe and party proceeded to Paleik in SingaingTownship by car and attended the opening ceremony of No 3 Paper Mill (Paleik) of the MyanmaPaper and Chemical Industries. . . . [After] General Than Shwe formally unveiled the signboardof the paper mill Commander Maj-Gen Ye Myint, Minister U Aung Thaung and TianjinMachinery Import & Export Corporation (Group) President Mr Sun Jian Rong formally openedthe mill. . . . At the hall of the mill, Minister U Aung Thaung explained that the mill is the veryfirst oneto produce newsprint in Myanmar and 25 tons of import-quality newsprint per day will beproduced by it. He also explained the area, preparatory measures, test-run employees strength,requirement of raw materials and others. . . . Managing Director of News and PeriodicalsEnterprise U Tin Kha explained matters on printing of newspapers in Yangon and Mandalay andthe quality of newsprints in being utilized. . . . The paper mill was built with the aims ofsupplying import-substitute newsprint, contributing towards regional development and acquiringexperience and techniques. The construction of the mill began in September 1999 and wascompleted in December 2000. The newsprint produced by the mill is now being experimentallyused in printing Myanma Alin and Kyemon dailies [in Mandalay].

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---------------------------------------------------------------------------------------------------------------------Mandalay: New Light of Myanmar: 01-11-01

Minister for Industry-1 U Aung Thaung arrived at No 3 Paper Factory of MPCI in Paleik,Singaing Township and inspected the warehouse for finished products, rolling of papers withmodern machines, warehouse for raw materials and categorizing of paper types, transportation ofraw material to pulping machine, crushing of raw material and production of paper. He alsoinspected quality control and testing of quality of paper and finished newsprint for the dailies. Atthe briefing hall of the factory, the minister met with the officials and pointed out weaknessesand strength and gave instructions for future tasks.

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KOREAN CARTON MAKER ATTRACTED BY CHEAP LABOUR POOL )ContentsYangon: Myanmar Times: 19-02-01

Like many other foreign-owned factories operating in the low-cost manufacturing environmentof the Hlaingthayar Industrial Zone on the outskirts of Yangon, Frank Han’s Myanmar Yescardboard box making company is flourishing. An outgrowth of what was originally a 100-percent Korean-owned garment business, the company started its box making operations in February1999. Today, its 200 local workers produce an average of 30,000 to 50,000 boxes of variousproportions per day.

“We invested here in Myanmar for a couple of reasons,” said Mr Han, Myanmar Yes’ president.“Firstly, we were attracted by the country’s profitable absence of import quota restrictions to theUnited States and Europe. “This is a very favourable point for business investors. In South Korea, and even in some poorer regional countries like Cambodia, what businesses can export isoften severely restricted. The second, but by no means the least factor, was Myanmar’sexceedingly inexpensive and abundant pool of unskilled labour, Mr Han explained. “This reallyis the main attraction of Myanmar. “Today in Indonesia, for example, labour costs are creepingover the US$100 per month mark. In China, this figure is around US$60-70.“ In Myanmar,factory level wages are still very low at around US$30-35 per month. The choice of where toinvest is becoming increasingly obvious for many South Korean foreign investors,” he said.

Myanmar Yes today produces 10 different types of cardboard boxes of various widths, lengthsand sizes. “Although our raw materials are imported, our prices are still very competitive withother factories’ products because we have modern machines to cut our production costs. Otherbox-making factories in Myanmar use far more labour intensive production methods,” said MrHan. “Our national market share is now about 30%.”

The company’s major competitors include the Deco-land Company, San Yee Carton BoxFactory, Leader Paper & Packaging Enterprises, Asia Cartons Ltd, and the Government’sMinistry of Industry-1 Paper Factory in Thanlyin. The high quality of its boxes was MyanmarYes’ chief selling point, Mr Han explained.“We have three Korean-made printing machines

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capable of producing six different coloured boxes. Other companies’ printing quality is not asgood as ours is, I think.”

Raw materials-wise, the company has opted out of purchasing locally and instead imports fromSouth Korea, Indonesia and Thailand. “When we started our factory, we bought raw materialsfrom local companies but the quality of what they were selling us became increasingly poor. Wecan really only obtain the quality materials we need overseas,” said Mr Han.

As for his business’ prospects for 2001, Myanmar Yes’ president was optimistic. “You can seemore and more foreign-owned enterprises are opening up here at the Hlaingthayar IndustrialZone. This is just one of a number of small signs that things are improving in Myanmar.” =====================================================================

PAPER MILL ENTREPRENEUR FACES TOUGH TIMES AHEAD )Contents Yangon: Myanmar Times: 11-12 -00

An entrepreneur with no technical background, whose determination and ingenuity inspired anindustry from the late 1970s, is finding himself on shaky commercial ground, as foreigninvestments, machines and technology raise once familiar stakes to new, unreachable levels. UNyein Pe set up his small paper factory with the help of a mechanic who had worked in theGovernment's Sittaung Paper Mill more than 30 years before. It was a process of trial and erroras the duo tried to produce paper in a home-made mill, competing against outfits usingestablished equipment. "At that time, there were about four or five people who wanted to set uppaper mills of their own, but not one of them met with success because they could not afford totake the risk of testing their machines for a long time," U Nyein Pe said. Some entrepreneurseven lost their properties when their ventures failed.

"At first, we weren't successful either, but we didn't lose hope, we stuck to our aim and day byday we started to se that our undertaking was going to be a success." U Nyein Pe and his friendmade parts for their machines via their own ingenuity and little else. After eight months oftesting, they began operations in 1979. Watching their success, other entrepreneurs tried tofollow in their footsteps. For those operators, with the requisite machinery locally made andtested, it was not such an uphill climb. "I helped set up new mills as a technician for somepeople who were interested in the business," a proud U Nyein Pe said, remembering the goodtimes. "I have already set up over 100 paper mills all over the country, especially Mandalay,Mawlamyine, Pyay and Taunggyi. "Around 1985, I was given K 30,000 for my technical adviceand K 180,000 for a small paper mill I helped set up."

His paper mill machine is now worth K 4 million and the operational costs are about K 200,000annually, including the labour costs of six workers. But the cost of a machine varies inaccordance with exchange rates, as iron plates, an essential part the mill, are imported fromChina. The raw material for the industry is used and recycled paper from the Saw Bwagyigonward central collection point. In addition, waste products from bookshops, binding services andpaper cutting services are gathered along with recycled boxes from import markets. "Now wehave to buy raw materials for K60 a viss (K 38 a kilo) for low quality paper cuttings and K80 (K

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50 a kilo) for better ones,” U Nyein said. Prior to the arrival of foreign investments here withopening of the economy from the early 1990s, the price was only K 15 a viss (K 9 a kilo)

When foreign businesses arrived they started paying K 70 per viss (K 44 a kilo) for therecyclables, sending prices skyrocketing. "Now, unlike previously, we sometimes havedifficulties getting our raw materials," he said. The company's major customers are the bookbinders concentrated in downtown Yangon on 32nd Street and businesses which packagewashing powder, fish and garments. The paper sizes produced are demand driven but the mostcommon product is 31" x 43" sheets at a cost of K 1,500 per 100 sheets. Over recent years therehas been little demand for bigger sheets. U Nyein Pe's thick paper is much sought after in thelocal printing market and appears as hard covering on exercise books and school texts. Onaverage, the price of this kind of paper is K 85 a viss (K 53 a kilo). .“Now our business is very stable,” the entrepreneur said. “But we have many competitors so ourprofit margin becomes very narrow as we have to compete in both quality and price. “Normally,we sell 1000 viss (1600kg) a month but the sales register as low as 350 viss (560kg) in the rainyseason.”As to power supply, they have to use 15 hp boiler that is fueled by saw-dust for operatingthe paper dryer as the electrical power supply is not available enough for the entire mill butadequate for the motor. His mill’s power supply is divided between a 15 horsepower boiler,fuelled by saw-dust, which operates the paper dryer with electricity running the rest of the plant –most of the time. If the future exceeds his expectations, U Nyein Pe would like to move hisindustry to the Shwe Pauk Kan industrial zone. But there are other problems. “To be honest, ourproducts are not good enough to be competitive with products produced using foreign machines,”he said.

“We need very much to improve our machines and seek foreign technology for our products tobe on par with those of other countries. “We rely on our naked eye to guess the thickness ofpaper. We have no special equipment to get precise measurements of our finished products so wecannot gauge their quality in any detail. “Although rapid changes are taking place in technologyin some parts of the world, we cannot discard our old machines because we don’t have the capitalor know-how to replace them. “So I am planning to start running my business with a foreignmachine. I won’t be able to buy a large one, only the smallest one from China which produces 3tons of paper a day, but I don’t think that goal will be realised in the near future. “We can borrowmoney from the Government (Bank) for new investment, but the interest rate is a bit high for anunpromising business like ours.”

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Figure 7: paper recycling in operation

=====================================================================EAST ASIAN TENDERS SOUGHT FOR NEW PAPER MILLS )ContentsYangon: Myanmar Times: 24-07-00

The government sector alone in Myanmar is spending more than US$2.6million yearly on paperimports and a solution for mending this hard currency spill has long been sought in country. As apart of its responsibility for deterring the paper import up to a certain degree Myanma Paper andChemical Industries (MPCI) has substantiated a plan for the building of a paper mill nearMandalay with machinery supplied from a Chinese company. Recycled newsprint and pulp willbe used as raw material in the plant which is expected to produce 25 tons daily. Currentgovernment daily consumption of newsprint is around 18 tons..

“Once the factory starts production, probably early next year, the government side at least willnot need to import newsprint altogether,” said U Thein Win, planning director of MPCI.“MPCI’splan is for a pulp mill near Tapyikkyin town in central Myanmar which will be capable ofproducing 200 tons of pulp per day,” said U Thein Win. “We are negotiating with Korean,Chinese and Japanese companies in this regard and hope things can be finalised by the end of thisyear.”

MPCI recently called bids for supplying the machinery for construction of a 25-ton per daycapacity pulp mill near the existing Yeni plant in central Myanmar, which is currently producing50 tons of pulp per day. “Possibly, we will give pulp instead of money to the machinery suppliersfor that project,” U Thein Win said. “We expect a considerable number of foreign bidders for theproject.”

The department is also planning to build 12 pulp, paper and chemical plants over the next fewyears. “We can export our pulp if these projects are successfully undertaken,” said U Thein Win. As for the use of chlorine for bleaching purpose is condemned internationally in fear of dioxincontamination, MPCI has contemplated a plan for the building of a hydrogen peroxide plant nearYangon, mainly for textile bleaching.

As a government enterprise MPCI is operating 9 factories throughout Myanmar including 3paper mills and two oxygen and nitrogen plants as well as amatch and paints factory. Revenues

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totaled K19 billion last year and the department netted more than K 363 million in profits duringthe last financial year. Another reason behind the MPCI decision to give keen emphasis onproducing paper at this stage is the greater use of it in the expanding print media world incountry. “Print media will remain at the helm of the public communication no matter how theinformation technology has developed worldwide,” U Thein Win remarked.

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PACKAGING INDUSTRY SQUEEZED BY FOREIGN COMPETITION )ContentsYangon: Myanmar Times: 26-06-00

The budding packaging industry in Myanmar has a long way to go for their products to remaincompetitive against imported cardboard boxes that enter the market with cheaper prices.Imported items are dominating the market, says U Kyaw Khin, a local businessman who makescartons in the Hlaing Tha Yar Industrial Zone, 22 kms from the heart of the City.

Local industrialists are faced with big issues – they are able to extend their businesses but marketforces are keeping demand low, with buyers naturally favouring the cheaper, imported product. Big prospective customers like London cigarettes and Myanmar beer do not buy cartons fromlocal suppliers. In all fairness they want to, but their ever-conscious budgets are pointing themanother way.

The major local manufacturers in the packaging industry in Yangon are Deco-land, Asia Cartons,Myanmar Yes and Leader Paper & Packaging. Imported items meanwhile are mainly comingfrom Singapore. U Kyaw Khin says an answer is to protect and support local manufacturers andhe believes the Government can do many things like creating more favourable conditions for thelocal manufacturers to remain in business despite stiff competition from their foreigncounterparts who produce the same items on economies of scale.

Capacity at packaging factories is still relatively small. The biggest in Yangon, for instance, canonly make 50,000 boxes of various sizes per day. By comparison, factories in Singapore or HongKong could be producing several million boxes a day. There are many reasons why the locally-made product is highly priced, and so in some ways U Kyaw Khin has an argument to putforward despite a global philosophy of removing tariffs and Government protection as part of anew world order.

Most of the raw materials for packaging have to be imported. It is perhaps the main reason. Andlocal manufacturers are not well positioned to have mass production lines because of limitedmarket demand.

There is also room for improvement in infrastructures in industrial zones. Dealing with thesituation by each manufacturer adds extra costs to production. It is normal practice for anindustrial zone to provide it with efficient infrastructure and to have essential facilities installedbefore entrepreneurs are invited to invest there,” said a local scholar.

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“Packaging is increasingly coming into play as an important role in the marketing of consumerproducts,” said a marketing manager from a local packaging firm. Attractive packs draw theattention of customers and sales volumes rise.

Factories are also in the habit of producing boxes or packaging only upon receipt of orders – theynever make them in advance. The argument from factories, of course, is the variousrequirements of clients who want specialist printing and custom-made sizing. For thosecontemplating to set up a factory much of machinery comes chiefly from China with Chinesecompanies providing technology and training for local firms. “One of the favourable conditionsis that packaging industry is not technologically complex and it requires fewer labourers,compared with a garment factory,” said a local manager.

Raw materials are available from both local suppliers and importers. “To produce quality cartons70pc imported raw materials and 30pc local are the ideal ratio. Customer satisfaction is importantas our products are mainly supplied to foreign customers like those who operate in the garmentindustry,” said U Kyaw Khin. He added that when much more local raw materials content isused, the aesthetic effect may not be as good.

Local packaging is generally inferior in terms of strength because the raw material emanatesfrom recycled paper. On the plus side, to increase quality local factories import raw materialslike paper and cardboard without duties. “It is very good for local industrialists,” said a managerat a local firm. “One of the serious matters for us to tackle with is that it sometimes takes muchlonger than we have expected for imported machinery spare parts or raw materials to arrive here,so have to keep a large inventory,” said an entrepreneur.

Industrialists have many fixed costs to bear which drag down their effectiveness. They eagerlywish that costs for leasing land and building a factory be cut down so that they will be in a betterposition to compete with their counterparts in some neighbouring countries. Conditions are nowmore favourable for an entrepreneur to engage in trade than to take up manufacturing business.Therefore, we earnestly hope that there will be more incentives from the government for morepeople to engage in manufacturing, the secondary sector of the economy, to help the countrypush forward markedly in the drive to bring about a modern and developed nation,” said thebusinessman.

“We take into account for such things as quality orientation, price competitiveness, massproduction and service like timely production and delivery,” said U Kyaw Khin replying on howto sustain market share.

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MYANMAR PAPER MILL OPENS IN DAGON MYOTHIT )Contents Yangon: New Light of Myanmar: 23-12-98

Myanmar Paper Mill of Asia World Industries Ltd opened at the comer of Muse and Haka streetsat Industrial Zone 1 in Dagon Myothit (South) Township this evening. Secretary-l of the SPDC Lt-Gen Khin Nyunt unveiled the signboard. Also present were member of the SPDC, Cabinet

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Ministers, the Mayor of Yangon, deputy ministers, officials of the SPDC Office, heads ofdepartment, Managing Director U Tun Myint Naing of AWIL and officials and guests. DeputyMinister for Construction U Tint Swe and U Tun Myint Naing formally opened it. U Tun MyintNaing reported on the construction of the mill, machines installed at the mill, the aim of the mill,production of finished goods from used paper, manufacturing of cardboard and plans to producestationery and newsprint.

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PULP AND PAPER INDUSTRY IN MYANMAR )ContentsFAO Country Report: 1997: Information from the Myanmar Forestry Departmenthttp://www.fao.org/documents/show_cdr.asp?url_file=/DOCREP/003/W5693E/W5693E08.htm

The major types of fibrous raw material resources available for the pulp and paper industry arebamboos, tropical hardwoods and agriculture residues. Bamboo in Rakhine and Tanintharyipresent huge potentials for pulp and paper industries. Kayin-wa (Mellocanna bambusoides) inRakhine has an estimated growing stock of 21 million metric tons capable of producing around830,000 tons of pulp annually while pure bamboo stands in Tanintharyi having a growing stockof 6 million tons could provide an annual pulp yield of 244,000 tons, if the bamboo forests areworked in a 10-year cutting cycle. Tropical hardwoods are another major resource for the pulpand paper industry. Typically, the tropical hardwood forests in Myanmar are made up of a largevariety of species growing in mixture. Out of (300) species recorded only (30) species areextracted for timber production and the remaining species are available for the promotion of pulpand paper industry. Apart from bamboo and hardwood resources, there are some agricultureresidues which are in hand as available raw materials for the establishment of small scale pulpand paper mills and cottage industries.

The Myanmar Paper and Chemical Industries (MPCI) is the main organization responsible forproducing pulp and paper in the country. There are 5 pulp and paper mills, namely: the No.1pulp and paper mill (Sittoung) with a capacity of 60 ton/day producing mixed pulp from bambooand hardwood, No.2 mill (Yeni) producing 10 ton/day of paper with pulp from the No.1 mill and30 ton/day of bamboo kraft sack paper, No.3 mill (Ma-U-bin) with a designed capacity of 6ton/day of jute board from jutestick, the Wrapping Paper Mill (Kanbe) producing 3 ton/day ofwrapping paper from waste paper, and the pulp and paper Pilot Plant (Hmawbi) producing toiletpaper. In the private sector there are more than 300 small cottage paper factories using recycledwaste paper with capacity ranging from ¼ to ½ ton/day.

The pulp and paper Industry in Myanmar is still in its infancy and has maintained a modest rateof development. Despite the huge potential of resources the present production of pulp, paper andpaperboard has not reached the demand of the country and considerable tonnage of differentgrades of paper and paperboard still have to be imported resulting in considerable drainage of FE,for example, US$ 7.9 million in 1994-95. The projection of paper requirement of major gradesare shown in appendix(III). MPCI, however, has gained considerable experience in producingpulp and paper from bamboo and tropical hardwoods supported by research and developmentworks of the Pulp and Paper Research Department at the Myanmar Scientific and TechnologicalResearch Department (MSTRD). A memorandum of understanding between the Government of

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Myanmar and Grasim Industries Limited of India for the establishment of a Rayon grade pulpplant was entered into in 1994 and the feasibility of establishing such a plant is now under studyin the Rakhine State.

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BAMBOO STANDS SUITABLE FOR PULP INDUSTRY IN MYANMAR )ContentsBamboos of Myanmar - Nyan HtunMinistry of Forestry, Forest Research Institute. Yezin, Myanmar: circa 1997http://www.ipgri.cgiar.org/publications/HTMLPublications/572/ch28.htm

Bamboos usually grow mixed with other species and they form the understorey in high forests.An almost pure bamboo forest of Melocanna baccifera, is found in the Arakan Yoma crossingfrom Pathein and Pye into Rakhine State, mixed with other species like Dendrocalamus strictus,Bambusa longispiculata and Thyrsostachys oliveri scattered over the range. Studies were madein 3 areas where a great quantity of bamboo was found growing: (1) Bago Yoma Area (a) Easternpart with bamboo area - 5969.95 km2; (b) Western part with bamboo area - 2224.8 km2; (2)Rakhine Yoma Area with bamboo area - 5059.27 km2; (3) Tanintharyee Division with bambooarea - 1872.57 km2

The species studied are Bambusa polymorpha and Cephalostachyum pergracile for areas (1) and(3) where they are abundant and Melocanna baccifera for area (2). The main objective of studieswas for extraction of bamboo for paper mill. The species selected are abundantly growing inthose areas and also because of their usefulness in making paper pulp. The studies includedcounting of number of culms per clump, number of clumps per area and the ages of clump

Because of the different ages of culms contained within clumpa for B. polymorpha and C.pergracile and number of bamboo per unit area for M. baccifera, the following cycles aresuggested by forest department. (1) 7 to 15 year cycle - B. polymorpha and C. pergracile (2) 3 to5 year cycle - M. baccifera. The suggested felling cycles were calculated depending on amount ofoutput of bamboo/ ton in certain areas. e.g. Rakhine area - 112 000 tons (with 15 year cycle)Tanintharyee - 42 998 tons (with 7 year cycle) Taungoo - 13 392 tons (with 7 year cycle)

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Figure 8: Bamboo stand in southeast Myanmar

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--------------------------------------------------------------------------------------------------------------------Bamboo Resources of MyanmarAsia-Pacific Forestry Sector Outlook Study: Country Report - Union of Myanmar FAO Working Paper Series: No APFSOS/WP/08: Forest Department: Ministry of Forestry,Myanmar June 1997: Section 6.4http://www.fao.org/documents/show_cdr.asp?url_file=//DOCREP/003/W5693E/W5693E00.htm

Bamboo grows abundantly throughout the country either mixed with tree species or in purestands. Pure stands of Kayin-wa(Mellocanna bambusoides) stretch over and area of about 8,000km2 on the Rakhine mountain range with an estimated growing stock of 21 million metric tons.Tanintharyi Division also contains pure stands of wa-ya (Oxytenanthera nigrociliata) over an areaof some 1,800 km2 with an estimated growing stock of 6 million tons. The bamboos in the BagoDivision are of mixed-forest type consisting of a number of different species of whichkyathaung-wa (Bambusa polymorpha), Tin-wa (Cephalostachym pergraule) and Myin-wa(Dendrocalamus strictus) are commercially important. Of the 96 known species of bamboo onlyabout 13 species are considered commercially important so far.

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Bamboos grow abundantly throughout the country either mixed with tree species or in purestands. Pure stands of Kayin wa (Melocanna bambusoides) stretch over an area of about 8,000km2 in Rakhine State in the west. Considerable sizes of pure bamboo stands are also present inTanintharyi Division in the southern most stretch of the country. The Kayin wa in Rakhine has anestimated growing stock of 21.34 million metric tons capable of producing around 830,000metric tons of pulp annually, while pure bamboo stands in Tanintharyi having a growing stock ofabout 6.09 million metric tons could provide an annual pulp yield of 247,904 metric tons, if thebamboo forests are managed under a cutting cycle of 10 years.(http://www.myanmar.com/Ministry/Forest/Forest_resource_base.html

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